It’s been almost 30 years since Jim Womack, Dan Jones and Dan Roos coined the term ‘lean’ in terms of productivity. They shared, and have continued to share, critical insights into how organisations can enjoy huge growth, services can deliver exactly as required when required and charities can make the very most of the donations they enjoy.
So its interesting to consider what has been achieved with these insights in that period given that in the last year around 40% of the global consulting market is made up of strategy setting and improvement – that’s around $95 billion by the way! (ninety five billion. per year)
Well I can tell you. Its not a great deal. Productivity has flat lined since 2008.
Around a trillion dollars has been spent on strategy setting and operational improvement in that time.
It is almost certain that there is not a direct correlation between improvement spend and total productivity. I’m sure some consultancy support increased productivity at those organisations that hired well and listened, learnt and acted on the advice given. But there is still a glaring problem here.
We call this the productivity puzzle and it is complex. It involves not only internal/external improvement effort but the integration and use of technology, media, political persuasion and global economic factors.
All of that said, productivity, put here simply as a relationship between inputted effort/cost for outputted service or revenue, is stagnant.
We have been enlightened to understand that the process to convert our efforts into deliverables contains steps that work to achieve the output and, many many more, steps that do not.
We know that if we reduce the steps that don’t add value we could use the time/effort/cash to do something else useful.
So why aren’t we? What is holding us up? – we have known how to do this for years, yet are not? This is the real puzzle.
Organisational improvement should absolutely not just be about reducing headcount to improve productivity. Quite the opposite actually.
I pride myself on simultaneously increasing productivity AND headcount. I believe that Businesses and Organisations have an obligation to support communities and can do this by providing sustainable, long term, engaging and educational employment in value adding work.
By optimising business processes we create the opportunity to do more, to grow the business and provide value for Customers, end users and Employees. The best business improvement is not about just reducing costs. It is about creating profitable places that support communities and about creating charities that maximise the percentage of donations spent on the cause.
Business or Organisational improvement is not a purely capitalist endeavour. It is an ethical capitalist journey that can truly help our society. Why wouldn’t you want to get involved in that!